Crane Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Crane purchases sails at $267 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $99 for direct materials, $84 for direct labor, and $90 for total manufacturing overhead. The $90 total manufacturing overhead includes $78,000 of annual fixed overhead that is allocated using normal capacity. The president of Crane has come to you for advice. "It would cost me $273 to make the sails," she says, "but only $267 to buy them. Should I continue buying them, or have I missed something?" (a) Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct material Direct labor Variable overhead Purchase price Total unit cost $ Crane should $ Make Sails Should Crane make or buy the sails? the sails. 99 $ $ Buy Sails $ $ Net Income Increase (Decrease)

Crane Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Crane purchases sails at $267 each but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $99 for direct materiak. $84 for direct labor, and $90 for total manufacturing overhead. The $90 total manufacturing overhead includes $78,000 of annual fixed overhead that is allocated using normal capacity. The president of Crane has come to you for advice. "It would cost me $273 to make the sails," she says, "but only 5267 to buy them. Should I continue buying them, or hwe I missed something? (a) Prepare a per unit anglysis of the differential costs. (Enter negative amounts using either a negotive sijn precediry the number es: -45 or parentheses eg (45)) Shoold Crane make or buy the sails? Craneshould the saih